Journal entries

Hi Guys,

PF employees contribution is a deduction in the salary. so this should be booked as a liability and not as expenses i believe. am i correct in this ?

i tried this journal

salary ac.  dr

To pf employees contribution(Liability)

but this makes salary as a profit and loss item and reduces the profit.

can anyone tell me the journal entry on how to book this as a liability.

 

 

Replies (2)

THE JE WILL B-:

SALARY A/C DR(INDIRECT EXP)

  TO PF PAYABLE A/C(CURRENT LIB)

  TO SALARY PAYABLE A/C(CURRENT LIB)

                                    AFTER THIS PASS A PAYMENT ENTRY IE.

SALARY PAYABLE A/C DR

     TO CASH/ BANK A/C

HOPE IT HELPS

Dear sachin kakkar

well this entry will reduce the profit.

but is there any entry we can make which creates only liability ?

is this question correct or wrong ? Please suggest me

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